Economic Causes of Populism in Central and Eastern Europe

There are two major theories of the rise of populism, one based on xenophobia, the fear of minorities and immigrants, and a second based on economic causes. This article advances an economic argument, showing that the rise of populism has been connected to a persistent lack of choice on economic policy in the neoliberal period and the run-up to EU accession. Regardless of how they voted, voters got neoliberal economic policies, which created vast inequalities and disadvantaged many workers. Populist parties offered to buck the status quo on economic policy and they delivered. Once in power, populist parties in Poland and Hungary took a new approach to national economic policy, with greater support for national champions, domestic capitalist groups, and redistributive social transfers. This populist economic model has proven to be distinct from the neoliberalism that governed all previous governments’ policies. And it shows signs of being popular. There is little evidence that it has a negative impact on growth, as some critics have warned. In order to understand and confront populism in Central and Eastern, it is necessary to comprehend the enduring appeal of the populist economic model and why many voters consider it to be superior to neoliberalism.